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Depreciation
The process of allocating the cost of a tangible asset over its useful life to account for wear and tear, obsolescence, or usage.
Residual Value
The estimated value of an asset at the end of its useful life, often used in depreciation calculations.
Straight Line Method
A depreciation method where an asset’s cost is reduced evenly over its useful life.
Unit of Production Method
A depreciation method where depreciation expense is based on an asset’s usage, output, or activity level